The Guardian (London) August 8, 2001

Forget Cancun, Globalization Has Destroyed The Real Latin America

by Isabel Hilton

Tony Blair is unlikely to be troubled on the beaches of Cancun in Mexico -
where he is taking a much needed holiday - by any challenge to the vision of
global prosperity that he promoted in his brief tour of Latin America.
Cancun is an affluent resort, much favored for Latin American summits and
well endowed with that combination of natural beauty and comfortable
surroundings that our leaders favor when they gather to order our lives.

But perhaps the prime minister might notice that the benefits of the
economic liberalization that most countries in Latin America have pursued
over the past 15 years are less evident to those around him than he might
hope. In fact, as a senior UN development program official put it two years
ago: "For the millions of poor, the slum dwellers, globalization now has the
face of cruelty, of unemployment and marginalization..." The distribution of
wealth and income in the region is the most unequal in the world and "the
rise in daily criminal violence ... continuing drug-related problems, as
well as the incidence of official corruption [are], in part, a manifestation
of the unequal pattern of development."

It is not a great moment for advocates of globalization in Latin America.
Argentina, for instance, was until lately a country cited as a fine example:
it had a president who, despite his Peronist label, had implemented the
policies of the free market, pegged the local currency to the dollar,
controlled inflation and carried out wholesale privatization. Argentina
appeared to blossom and bankers and financiers sang the praises of Carlos
Menem from New York to Zurich. Now, though, ex-president Menem faces
criminal charges, Argentina's external debt has reached a staggering £90bn,
unemployment stands at 18% and the country is bankrupt.

In Brazil, things are only slightly better. There, too, the president is a
liberalizer, but after a promising start, the economy has been plagued by
recurring crises. Two years ago, with inflation running at nearly 20% and a
general collapse in middle-class incomes, more than 100,000 people marched
in Brasilia to demand the resignation of the president and an end to IMF
reforms.

Then there is Peru - another case of a promising start gone wrong. Alberto
Fujimori's regime ended last year in chaos, but he also was once the darling
of international finance - a man who appeared to have tamed inflation and
was liberalizing the economy. Today he is hiding out in Japan, a country of
which he recently admitted to being a citizen. (If he had owned up 10 years
ago, of course, he would have been disqualified the presidency of Peru.) His
government collapsed in a corruption scandal of breathtaking proportions and
he is reduced to posting messages on his website, singing his own praises.

Colombia also has a president who is keen on liberalization - but his main
preoccupation is the fact that his country has become, with Plan Colombia,
the latest arena for the theater of American military illusions.

Plan Colombia has notched up the achievement of uniting most Colombians
against the environmental disaster of enforced aerial spraying of toxic
chemicals and further victories are in the pipeline - a growth of
paramilitary human rights abuses, escalation of military activity and the
likely export of Colombia's problems to her neighbors are all on the cards.


But there is one major Latin American country that is bucking the trend of
liberalization: in Venezuela, Hugo Chavez, the still popular president of
the country that boasts one of the largest oil reserves in the western
hemisphere, offers an interesting exception to the general rule.

In most of Latin America it is the poor and the newly impoverished middle
classes - the teachers and health workers who no longer have jobs, the
pensioners who no longer have pensions - who articulate the opposition to
economic liberalism. They have the bad grace to point out that, so far at
least, it has brought dramatic increases in inequalities in the distribution
of incomes and assets.

In Venezuela, though, it is the president who says so. Chavez is an
old-fashioned nationalist caudillo who prefers the company of Fidel Castro
to that of George Bush or Tony Blair. Chavez seems determined to introduce
to Venezuela some Cuban-style social control though, so far, this does not
seem to have dented his domestic ratings. He's a wild card who might not
matter but for those oil reserves.

In the 50s and 60s, behavior such as Chavez's would certainly have invited
destabilization and a military coup to save his electorate from the
communist menace. The menace is not what it was, so I trust that the rumors
circulating in Washington about US encouragement for a coup against Chavez
are ill founded. Otherwise, it might seem as though democracy is to be
encouraged only in countries that elect leaders who are willing to make the
world safe for globalization - and that can't possibly be what Mr Blair and
his new friend President Bush believe, can it?